Maxim Manufacturing operations for 2022 are as follows: Per unit: $ Sales price 50 Direct material cost 18 Direct wages 4 Variable production overhead 3 Per month: Fixed production overhead 99 000 Fixed selling expenses 14 000 Fixed administration expenses 26 000 Variable selling expenses is 10% of sales value. Normal capacity was 11 000 units per month. October 2022 November 2022 Units Units Sales 10 000 15 000 Production 12 000 16 000 Using the two methods: Compute the unit production cost Determine the value of the closing inventory Prepare the Marginal Income Statement and the Absorption Income Statement for February 2022 Reconcile the net profits for February Comment on the differences of the two systems with respect to: Stock valuations and Period profits
Maxim Manufacturing operations for 2022 are as follows:
Per unit: $
Sales price 50
Direct material cost 18
Direct wages 4
Variable production
Per month:
Fixed production overhead 99 000
Fixed selling expenses 14 000
Fixed administration expenses 26 000
Variable selling expenses is 10% of sales value.
Normal capacity was 11 000 units per month.
October 2022 November 2022
Units Units
Sales 10 000 15 000
Production 12 000 16 000
Using the two methods:
- Compute the unit production cost
- Determine the value of the closing inventory
- Prepare the Marginal Income Statement and the Absorption Income Statement for February 2022
- Reconcile the net profits for February
- Comment on the differences of the two systems with respect to: Stock valuations and Period profits
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- Reconcile the net profits for February
- Comment on the differences of the two systems with respect to: Stock valuations and Period profits
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